Barriers to chemical recycling

The Global Resources Outlook 2019 conclude that about half of the global emission of GHG:s (greenhouse gas) and about 90% of the challenges related to water stress and loss of biological diversity is related to the extraction and processing of virgin materials¹. The GHG from global waste management is estimated to 3-5% of total GHG emissions². Currently about 100 billion tons of material is entering the global economy today out of these 100 billion tons only 8,6 billion tons is recycled materials³.

Recycling of materials in such a way that less virgin material is extracted and processed presents an attractive way to reduce GHG emissions. The current 8,6% of recycled global material supply is not very efficient – quality is lost in the processes and hence used for low quality purposes. For a more fresh, detailed description of the EU situation for steel, plastics and aluminium read Material economics report Preserving value in EU industrial⁴.

If managed correctly increased chemical recycling of waste could become an important component of the circular economy. In our opinion, chemical recycling should be used as a mean to detoxify waste into sustainable raw materials (feedstock for production) or final products thereby preventing extraction and processing of virgin resources. In the long run society need to design products so that they are designed for recovery from the start – the cleaner the products the less need for advanced processing to ensure good recovery.

Though several steps in this direction have been taken during the recent years within policy, we think it still will take decades until we see the results in the waste stream. Thus, for decades to come we will need more advanced processing of waste to convert existing waste streams for our societal needs of detoxification and housekeeping of resources.

As we see it incineration of waste will play a key role by destroying organic toxic elements and at the same time achieve more concentrated streams in terms of ashes and air pollution control residues. These concentrated streams can then be undertaken chemical recycling (such as recovery of Phosphor from incinerated sewage sludge or recovery of Potassium from Air Pollution Control residues from incineration of MSW). In our view chemical recycling and incineration should not be regarded as competing technologies rather as different tools serving different purposes in the circular economy.

Barriers

In our opinion there are several fundamental, non-technical, problems that needs to be addressed in order for society to achieve an effective sustainable chemical recycling serving the circular economy. Below is a short description of each of these barriers.

1. Pricing of virgin materials does not reflect the external costs nor and their
scarcity or substation potential. As a rule of thumb, chemically recycled materials is competitive only in times when commodity prices are high or extremely high, otherwise not. A chemical process with efficient detoxification that handles a complex feedstock such as waste is often more expensive than linear processing of a less complex virgin feedstock in the linear economy. Without legal requirements there’s a lack of incentive for producers to use more expensive secondary feedstock.

2. An effective detoxification in chemical recycling leads to a waste that need
disposal. A company starting with a feedstock holding 1% of a valuable substance and 99% non-valuable substances will produce a lot of waste when extracting the 1% of valuable substances Today, landfilling comes with a cost that virgin production (mining) don´t have, i.e. effective detoxification in sustainable chemical recycling comes with paying a tax. If the feedstock is a virgin source – there will be no landfill taxes applied whereas if the feedstock is a waste stream landfill tax will apply if the recovery process is undertaken in a country with landfill tax. Without a fair level of playing field compared to virgin extraction it will be hard for new innovative chemical recycling processes to reach the market.

3. Costs for quality control of waste flows is much more expensive compared to virgin sources. This reality in turn depends on lack of detailed information of composition combined with a time delay from when a product was put on the market and when it´s wasted. Production standards changes faster than lifetime of many products - meaning current waste flow often consists of the wrong quality compared to production standards used. One example is softening compounds used in vinyl flooring. Vinyl flooring produced twenty years ago may contain components now forbidden in EU. The cost to find out if a specific vinyl flooring waste, by sampling and testing for this component is likely much higher than the potential material value in the vinyl flooring should it be recovered (at least with current pricing of virgin materials and emissions).

4. It’s very complicated to reach industrial economical scale for chemical recycling of waste. In general, virgin materials are operated on site levels of millions of tons per year. The feedstock is sourced on the world market or controlled by a few stakeholders with whom agreements can be done. CAPEX can be distributed over large volumes. Due to the scattered ownership and many stakeholders involved when it comes to waste it’s difficult to source and secure the volumes needed for advanced processing of secondary materials. As with other chemical processes economical scale is a crucial factor.

5. Legal barriers such as lack of standardization The journey from waste to a marketable product in EU is very complicated and sometimes even forbidden. One example is feed phosphates cannot currently be produced from a waste based feedstock regardless the quality of the final product. Lack of EU wide EoW-criteria for many waste categories is lacking thereby prohibiting use of waste based feedstock in existing production plants in EU. Example: A typical chemical production plants in EU lack permits to use waste as a feedstock – therefore waste based feedstock cannot be used unless the permit for the plant is changed regardless if it’s possible from a technical standpoint. Typically the change of a permit is a very expensive and risky venture– so it’s not undertaken in many cases.

6. Volatile pricing: In a well-functioning circular economy, secondary resources is used in the supply chains regardless the price for virgin materials. This is not the case today. Typically, waste management is procured with fixed prices contracts for several years, blocking profitable recycling when commodity prices goes down. The crises in EU plastic recycling industry during the COVID came as a result of a low oil price in combination with difficulties to increase the charges of producers of plastic waste due to fixed prices in contracts. This means the gate fee for plastic waste recycling cannot be raised to compensate for lower price for recycled plastic when oil prices go down. Hence, the cheapest disposal option will be incineration rather than recycling.

Final remarks

The missing link to increase chemical recycling is foremost the missing demand and pricesetting in the market for reused materials vs virgin. For many substances technical solutions already exists, or could be developed, but as long as there is market failures in the pricing these solutions will not be able to compete to existing solutions. That is also why it can be misleading to focus on certain waste streams based on todays waste statistics. The starting point should be total resource consumption rather than waste production which then leads to today's limping recycling. The total material consumption was 92 billion tons pers year and the total MSW generation was 2 billion tons in 2016. Used correctly chemical recycling can be used as an effective tool to address the combined resource and climate challenge.

¹ Global Resources Outlook | Resource Panel
² Global Waste Management Outlook | UNEP - UN Environment Programme (ISBN: 978-92-807-3479-9)
³ The world is now only 8.6% circular - CGR 2020 - Circularity Gap Reporting Initiative (circularity-gap.world)
⁴ Preserving value in EU industrial materials - Material Economics